NYMEX crude for October delivery was up 31 cents at $45.14.

Oil prices hit a one-week high on Monday after Russia and Saudi Arabia agreed to co-operate on stabilising the oil market, but they have since fallen due to mounting uncertainty over a deal. Despite rebounding this year, oil is trading at less than half mid-2014 peaks above $100 per barrel.

Opec and non-Opec producers such as Russia are expected to discuss an output freeze at informal talks in Algeria on 26 to 28 September.

Few analysts believe Opec will be successful in making price gains last, especially when the biggest crude exporters such as Saudi Arabia and Iran are pumping all they can in a fight to raise market share.

Analysts at Citi warned that Iranian involvement would be a key hurdle for an Opec decision, and added it was unlikely that any viable agreement would impact physical market balances.

Saudi Arabia's Foreign Minister Adel al-Jubeir said on Tuesday that the country would go along with a freeze in oil output if other producers agreed one, but cautioned that Iran, which is aiming to raise output to pre-sanction levels, could foil any attempt to limit output.

Iran signalled on Tuesday that it was prepared to work with Saudi Arabia and Russia to prop up oil prices as it began to bargain with Opec on possible exemptions from output limits.

Traders said US crude was supported by Genscape data showing a draw of about 700,000 barrels last week at the Cushing, Oklahoma, delivery hub for US crude futures.

US commercial crude inventories likely dropped by 100,000 barrels last week after rising for two straight weeks, a preliminary Reuters poll showed on Tuesday.

Gasoline stocks likely fell by 500,000 barrels, while distillate stocks are forecast to have increased by 1 million barrels, the poll showed.

The American Petroleum Institute is set to release its weekly oil data on Wednesday, delayed a day from usual due to the Labor Day holiday on Monday.